Agencies issue new rules to boost biofuels production

The Environmental Protection Agency and the Agriculture Department last week published new rules aimed at increasing production of biofuels. The steps are part of the Obama administration's broad plan to lay the groundwork for a new clean energy economy less dependent on imported petroleum.

EPA published a final rule implementing renewable fuel standards included in the 2007 Energy Independence and Security Act. The standard will require biofuels production to grow from 11.1 billion gallons in 2009 to 36 billion gallons in 2022, with 21 billion gallons coming from advanced biofuels.

Advanced biofuels, as defined in the law, are not derived from corn, whereas corn-based ethanol is the most common biofuel used in the United States today. Meeting the new standards will require significant investment in next-generation cellulosic biofuels technologies now being developed.

Some of that investment will come from the Agriculture Department. On Feb. 3, the department published a new rule implementing the Biomass Crop Assistance Program to subsidize the conversion of biomass to bioenergy. Biomass is organic material that contains stored energy from the sun. The rule, which is open for public comment for 60 days, establishes program guidelines for issuing grants and loans to support commercialization of biofuels and renewable energy.

"Advancing biomass and biofuel production holds the potential to create green jobs, which is one of the many ways the Obama administration is working to rebuild and revitalize rural America," Agriculture Secretary Tom Vilsack said in a statement. "Facilities that produce renewable fuel from biomass have to be designed, built and operated."

The program, which was authorized in the 2008 Food, Conservation and Energy Act, is designed to ensure that a sufficiently large base of new, nonfood, nonfeed biomass crops is established to meet future demand for renewable energy by reducing the financial risk for farmers, ranchers and landowners.

Also last week, the White House released the first report from the Biofuels Interagency Working Group, which includes EPA, Agriculture and the Energy Department. The report, "Growing America's Fuel," found that the nation will not meet its biofuels production goals by 2022 unless federal agencies and the private sector take steps to develop a supply chain and invest in more research and development.

The report notes that the recession has hampered private investment in advanced biofuels production, but predicts next-generation biofuels will be one of the nation's most important industries in the 21st century.

"Significant gaps in the biofuels supply chain need to be addressed," the report noted. "Some key policy tools, such as the DOE and USDA project loan guarantees and research programs, could be targeted more effectively to support the emerging industry and to deliver outcome-driven results."